Exploring the incidence and intensity of fuel poverty in the EU

Harriet Thomson

University of York

www.fuelpoverty.eu

Background

• There have been several pan-EU analyses of fuel poverty (e.g. Thomson and Snell, 2013; Bouzarovski, 2013; EPEE, 2009; Healy and Clinch, 2002)

• Most studies have used the EU Statistics on Income and Living Conditions (EU-SILC), with a focus on three key indicators:

1. Ability to afford to keep the home adequately warm

2. Leaking roof, damp walls/floors/foundation, or rot in window frame or floor

3. Arrears on utility bills in last 12 months

EU-SILC survey

• Comparable statistics on income, living conditions and social exclusion

• Best source of data presently available, in terms of:

• Country coverage - EU28 countries plus Iceland, Norway, Turkey

• Sample size and frequency - annual sample of ~ 100,000 EU households

• Data format – both cross-sectional and longitudinal (4 year rotation)

• But, there are limitations associated with subjective indicators:

• Proxies

• Error of exclusion

• Potentially poor overlap with other measures

Core EU-SILC Index of Fuel Poverty (CIFP)

• Previous research has combined the indicators at the country-level to produce single composite scores (Healy and Clinch, 2002; Thomson and Snell, 2013)

• The interrelation of indicators at the household-level has not been explored

• The CIFP is a summative index that adds up the number of EU-SILC indicators reported, with a possible range of 0 – 3

• This is the first pan-EU household-level index of fuel poverty severity

Correlations between the indicators

• Moderate associations were found between the variables

• The fact they are not highly correlated is an indication that the variables are capturing different aspects of fuel poverty

• In others words, there is no double-counting from including two closely related indicators

Utility arrears Leak/damp/rot Inability to afford warm homeUtility arrears 1.00 .35 .47Leak/damp/rot .35 1.00 .39Inability to afford warm home .47 .39 1.00

Tetrachoric correlation coefficient matrix of key EU-SILC indicators. Data: EU-SILC 2007 Cross Sectional All correlations are statistically significant at the p < .001 level

CountryNumber of indicators reported (% of households) in 2010

One Two Three

Austria 15.6 2.6 0.3

Belgium 20.2 4.0 0.6

Bulgaria 42.8 25.3 6.4

Cyprus 30.4 15.2 3.0

Czech Republic 15.5 2.4 0.3

Denmark 10.5 1.2 0.1

Estonia 22.4 3.8 0.6

Finland 10.4 0.9 0.1

France 15.8 3.4 0.7

Germany 15.4 2.7 0.5

Greece 26.8 8.8 2.5

Hungary 23.2 10.5 3.3

Ireland 19.4 4.8 0.8

Italy 23.2 6.3 1.6

Latvia 31.7 13.5 3.0

Lithuania 31.3 9.8 1.9

Luxembourg 16.4 0.8 0.0

Malta 22.1 4.8 0.3

Netherlands 16.3 1.6 0.2

Poland 22.2 7.6 2.3

Portugal 32.6 11.2 1.2

Romania 29.1 11.6 4.6

Slovakia 15.1 2.1 0.5

Slovenia 32.1 9.9 1.4

Spain 24.0 4.2 0.5

Sweden 11.1 1.2 0.1

United Kingdom 16.5 3.6 0.5

2010 CIFP country rankingsCountry Overall rank Rank for % experiencing 1 indicator Rank for % experiencing 2 indicators Rank for % experiencing 3 indicators

Finland 1 1 2 2

Denmark 2 2 3 3

Sweden 3 3 4 4

Luxembourg 4 10 1 1

Czech Republic 5 6 7 6

Netherlands 5 9 5 5

Slovakia 5 4 6 9

Austria 8 7 8 7

Germany 9 5 9 10

France 10 8 10 15

United Kingdom 10 11 11 11

Malta 12 14 15 8

Belgium 13 13 13 14

Estonia 14 16 12 13

Ireland 15 12 16 16

Spain 16 19 14 12

Italy 17 18 17 19

Poland 17 15 18 21

Greece 19 20 19 22

Lithuania 20 23 20 20

Hungary 21 17 22 25

Slovenia 21 25 21 18

Portugal 23 26 23 17

Cyprus 24 22 26 23

Romania 24 21 24 26

Latvia 26 24 25 24

Bulgaria 27 27 27 27

Comparison with official UK measures

• The proportion of households reporting one CIFP indicator is similar to the 10% measure, but higher than the Low Income High Costs (LIHC) measure

• This suggests the CIFP has some face validity

• However, the overlap between consensual and expenditure measures needs further research

YearNot fuel poor (%) Fuel poor (%)

LIHC 10% CIFP LIHC 10% CIFP (1 indicator)

2007 89.0 86.8 80.1 11.0 13.2 17.0

2008 88.6 84.4 79.9 11.4 15.6 16.7

2009 88.5 81.6 78.8 11.5 18.4 18.1

2010 88.5 83.6 79.4 11.5 16.4 16.5

2011 89.1 85.4 78.8 10.9 14.6 17.5

Sociodemographic analysis – key results

• Reporting a higher number of CIFP indicators is generally associated with lower educational attainment

• In the majority of countries over 50% of households reporting CIFP indicators contain at least one person with a chronic illness

• Positive association between income poverty and CIFP, with a strong income disparity:

Number of CIFP indicators Median disposable household income (EU27)

0 €24,245.00

1 €17,000.00

2 €10,800.00

3 €8,073.00

EU27 median disposable household income by CIFP. Data: EU-SILC 2010

Sociodemographic analysis – key results cont.

• Generally single parent households, and couples with 3+ dependent children have the highest odds ratio for reporting CIFP indicators

• Very varied results for the dwelling type(s) and tenure that place households at most risk of CIFP fuel poverty

• Lack of fixed heating is highest within households reporting all 3 CIFP indicators

• Central heating prevalence is highest among households not reporting any problems

• A paradox in which countries with milder climates generally experienced higher rates of fuel poverty than cold countries in 2010

Summary

• The CIFP index is the first measure to show the interrelation of fuel poverty issues at the household-level in Europe

• Fuel poverty problems are widespread and varied

• The index has good face validity compared to the UK’s 10% measure

• Of households reporting problems, most only report 1 indicator

• A variety of factors are linked to reporting indicators, including income, central heating type, household composition, chronic illness

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